2 NEW YORK CITY TEACHERS' RETIREMENT SYSTEM REGULAR BOARD MEETING 3 held on Thursday, December 18, 2014 at 4 55 Water Street New York, New York 5

Transcription

1 1 1 2 NEW YORK CITY TEACHERS' RETIREMENT SYSTEM REGULAR BOARD MEETING 3 held on Thursday, December 18, 2014 at 4 55 Water Street New York, New York 5 6 ATTENDEES: 7 MELVYN AARONSON, Chairperson, Trustee, TRS 8 SANDRA MARCH, Trustee, TRS THOMAS BROWN, Trustee, TRS 9 JENNIFER MALDONADO, Trustee CAROLYN WOLPERT, Trustee, Finance 10 JOHN DORSA, Trustee, Comptroller's Office PATRICIA REILLY, Executive Director, TRS 11 VALERIE BUDZIK, TRS RENEE PEARCE, TRS 12 PAUL RAUCCI, TRS ANDREW BRADFORD, TRS 13 LIZ SANCHEZ, TRS JOHN GIBNEY, Actuary's Office 14 KEITH SNOW, Corporation Counsel ROBERT BETHELMY 15 CARMELA CRIVELLI ANNETTE HANRAHAN 16 ANTHONY MEZZACAPPA ELLEN DELEO

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3 2 1 2 P R O C E E D I N G S 3 (Time noted: 3:45 p.m.) 4 MS. REILLY: Good afternoon. We're going 5 to begin the December 18, 2014 regular meeting of the 6 Teachers' Retirement Board. I will start by calling 7 the roll. 8 Melvyn Aaronson? 9 CHAIRPERSON AARONSON: Here. 10 MS. REILLY: Thomas Brown? 11 MR. BROWN: Here. 12 MS. REILLY: Jennifer Maldonado? 13 MS. MALDONADO: Here. 14 MS. REILLY: Sandra March? 15 MS. MARCH: Present. 16 MS. REILLY: Susannah Vickers? 17 MR. DORSA: John Dorsa, for the 18 Comptroller. 19 MS. REILLY: Carolyn Wolpert? 20 MS. WOLPERT: Here. 21 MS. REILLY: We have a quorum. 22 We will proceed. The next item is an 23 update on TRS operations. Ellen DeLeo will give an 24 update. 25 MS. DELEO: Two updates. TRS has begun

4 3 1 working with FISA to complete the generation of the s for non-periodic distribution. It's expected 3 that FISA will generate 1099s on behalf of TRS for 4 approximately 41,500 members and beneficiaries. 5 In addition, TRS will be mailing an 6 informational brochure in early January to just over members that are new retirees, to explain the they will be receiving for the first time for the 9 tax year On December 3, TRS was contacted by the 11 New York State Department of Financial Services. The 12 Department informed TRS it would be conducting an 13 examination into the condition and affairs of the New 14 York City Teachers' Retirement System covering the 15 period July 1, 2008 through June 30, The objective of the examination is to 17 evaluate the fund's governance. The examination will 18 primarily focus on a review of various core fund 19 functions, including fiduciary, financial, actuarial, 20 investment, risk management, information technology 21 and member treatment. 22 Field work for the examination is set to 23 begin on December 22, 2014, and we anticipate it will 24 last between six and nine months. 25 MS. REILLY: Thank you, Ellen.

5 4 1 The next item is the executive director's 2 report, and the first item there is the next meeting. 3 It's been suggested that the next regular meeting of 4 the Teachers' Retirement Board be held on January 22, CHAIRPERSON AARONSON: Everybody note that 7 in your calendars MS. REILLY: Next is a resolution adopted by emergency vote on November 26, 2014, the TRS modernization program. 11 CHAIRPERSON AARONSON: Move to the 12 resolves. 13 MS. REILLY: "Resolved, that the Board 14 authorizes and funds TRS Modernization Program to 15 replace the current legacy pension administration 16 systems with a modernized pension administration 17 system to meet TRS' business requirements at a high 18 confidence cost, ranging from $122.5 million to $ million of funding from the TDA and Variable Program; 20 and between $44 million and $56.5 million of funding 21 from the QPP, over a period of six years, minus monies 22 previously authorized. 23 "And be it further resolved that the 24 Executive Director is hereby authorized and directed 25 by the Board to enter into a contract with Sagitec

6 5 1 Solutions for the remainder of the Modernization 2 Program. 3 "And be it further resolved that the TRS 4 agency budget for fiscal year 2015 shall be increased 5 in the amount of $15,102,360 to be taken from TDA and 6 Variable Expense Funds and $5,873,140 to be provided 7 by QPP funding to pay for the Modernization Program, 8 such that the total amount allocated for FY15, 9 including previously authorized funding, will be equal 10 to $25,200,000 provided by the TDA and Variable 11 Expense Funds and $9,800,000 provided by QPP funding." 12 CHAIRPERSON AARONSON: Do I hear a motion 13 to accept this resolution? 14 MS. MARCH: So moved. 15 MS. WOLPERT: Second. 16 CHAIRPERSON AARONSON: Discussion? 17 (No response.) 18 All in favor? 19 (A chorus of "Ayes.") 20 Any opposed? 21 (No response.) 22 Motion is carried. 23 MS. REILLY: Authorization to the 24 Comptroller of the City of New York to invest certain 25 funds.

7 6 1 MS. MARCH: Can this resolution be read in 2 or put into the calendar by the stenographer, rather 3 than you reading it, the resolves? 4 MS. REILLY: Okay. 5 CHAIRPERSON AARONSON: Everybody agree? 6 Okay. 7 8 "At its meeting on September 18, 2014, the 9 Teachers' Retirement Board authorized the Comptroller 10 to invest certain funds of the Teachers' Retirement 11 System for a period of three months. In the event 12 that the Board desires to continue this authorization, 13 the following resolution is submitted for 14 consideration and approval: 15 "Resolved, by the Teachers' Retirement 16 Board, as trustees of the Teachers' Retirement System 17 that, in accordance with Section and Section of the Administrative Code of the City of New 19 York, the Comptroller of the City of New York is 20 hereby authorized and requested, in accordance with 21 Section of the Administrative Code of the City 22 of New York, to invest consistent with the investment 23 policies of the Teachers' Retirement System of the 24 City of New York, the contingent reserve fund, the 25 pension reserve fund, the annuity savings fund and the

8 7 1 annuity reserve fund referred to in Section of 2 the Administrative Code of the City of New York, other 3 than the portion thereof held for currrent needs, 4 pursuant to Section , subject to the terms and 5 limitations set forth herein. 6 "1. The Comptroller shall have the power: 7 "A. To make any investment, which the 8 trustees of the Teachers' Retirement System are 9 authorized by law to make, including stock investment 10 in securities as authorized by the Retirement Board in 11 its resolution of November 20, However, any 12 investment in any tax-exempt security shall require 13 prior approval of the Board. 14 "B. To hold, sell, assign, transfer, or 15 dispose of any of the properties, securities or 16 investments in which any of the funds of the Teachers' 17 Retirement System shall have been invested, including 18 the proceeds of such investments and any monies 19 belonging to such fund, subject to the terms, 20 conditions, limitations, and restrictions imposed by 21 the law upon the trustees of the Teachers' Retirement 22 System. 23 "C. In the name of the Comptroller, as 24 agent of the trustees, to foreclose mortgages upon 25 default or to take title to real property in such

9 8 1 proceedings in lieu thereof, or to lease and sell any 2 properties so acquired. 3 "2. Any termination, expiration or 4 revocation of this delegation to invest shall not 5 affect any binding commitment previously made by the 6 Comptroller pursuant to such delegation, and the 7 Comptroller shall have the power to discharge fully 8 any such binding commitment according to its terms. 9 "3. The authority hereby granted to the 10 Comptroller of the City of New York by the Teachers' 11 Retirement Board for the investing of its funds shall 12 be limited to a three-month period terminating March 13 31, "4. Investment of funds of the Teachers' 15 Retirement Board in real estate mortgages which are 16 not guaranteed by the City of New York, the State of 17 New York, and/or the United States governments, may be 18 made by the Comptroller in accordance with an agreed 19 procedure contained in a memorandum dated March 16, "5. The transactions executed within the 22 provisions of paragraphs 1-4 of this resolution shall 23 be submitted to the Teachers' Retirement Board at the 24 next meeting following the execution of such 25 transaction."

10 9 1 2 CHAIRPERSON AARONSON: We need a motion 3 and vote on this resolution. 4 MR. DORSA: So moved. 5 MS. MARCH: Second. 6 CHAIRPERSON AARONSON: Any discussion? 7 (No response.) 8 All in favor? 9 (A chorus of "Ayes.") 10 Any opposed? 11 (No response.) 12 Motion carries. 13 MS. REILLY: Authorization to the 14 Comptroller of the City of New York to invest certain 15 tax-deferred annuity funds. 16 MS. MARCH: Same for this resolution, 17 please. 18 CHAIRPERSON AARONSON: Does everybody 19 agrees to have it written in the minutes? And is 20 there a motion? 21 MR. DORSA: So moved. 22 CHAIRPERSON AARONSON: Second? 23 MR. BROWN: Second. 24 CHAIRPERSON AARONSON: Any discussion? 25 (No response.)

11 10 1 All in favor? 2 (A chorus of "Ayes.") 3 Any opposed? 4 The ayes have it. 5 6 "At its meeting on September 18, 2014, the 7 Teachers' Retirement Board authorized the Comptroller 8 to invest, for a period of three months, the net 9 contributions of the Tax-Deferred Annuity Program for 10 participants electing the fixed portion of the 11 Program. In the event that the Board desires to 12 continue to have these funds invested by the 13 Comptroller of the City of New York, the following 14 resolution is submitted for consideration and 15 approval. 16 "Resolved, by the Teachers' Retirement 17 Board as trustees of the Teachers' Retirement System 18 that, in accordance with Sections and Section of the Administrative Code of the City of New 20 York, the Comptroller of the City of New York is 21 hereby authorized and requested, in accordance with 22 Section of the Administrative Code of the City 23 of New York, to invest consistent with the investment 24 policies of Teachers' Retirement System of the City of 25 New York the portion of the annuity savings fund and

12 11 1 the annuity reserve fund arising from the tax-deferred 2 annuity net contributions, subject to the terms and 3 limitations set forth herein. 4 "1. The Comptroller shall have the power: 5 "A. To make any investment, which the 6 trustees of the Teachers' Retirement System are 7 authorized by law to make, including stock investment 8 in securities as authorized by the Retirement Board in 9 its resolution of November 20, However, any 10 investment in any tax-exempt security shall require 11 prior approval of the Board. 12 "B. To hold, sell, assign, transfer, or 13 dispose of any of the properties, securities or 14 investments in which any of the funds of the Teachers' 15 Retirement System shall have been invested, including 16 the proceeds of such investments and any monies 17 belonging to such fund, subject to the terms, 18 conditions, limitations and restrictions imposed by 19 the law upon the trustees of the Teachers' Retirement 20 System. 21 "C. In the name of the Comptroller, as 22 agent of the trustees, to foreclose mortgages upon 23 default or to take title to real property in such 24 proceedings in lieu thereof, or to lease and sell any 25 properties so acquired.

13 12 1 "2. Any termination, expiration or 2 revocation of this delegation to invest shall not 3 affect any binding commitment previously made by the 4 Comptroller pursuant to such delegation, and the 5 Comptroller shall have the power to discharge fully 6 any such binding commitment according to its terms. 7 "3. The authority hereby granted to the 8 Comptroller of the City of New York by the Teachers' 9 Retirement Board for the investing of its funds shall 10 be limited to a three-month period terminating March 11 31, "4. Investment of funds of the Teachers' 13 Retirement Board in real estate mortgages which are 14 not guaranteed by the City of New York, the State of 15 New York, and/or the United States government, may be 16 made by the Comptroller in accordance with an agreed 17 procedure contained in a memorandum dated March 16, "The transactions executed within the 20 provisions of paragraphs 1-4 of this resolution shall 21 be submitted to the Teachers' Retirement Board at the 22 meeting next following the execution of such 23 transaction." MS. REILLY: Attendance at a conference.

14 13 1 The following resolution is presented for 2 consideration and possible adoption. 3 "Resolved, that the Trustees of the 4 Teachers' Retirement Board hereby approve the 5 attendance and participation of the Executive Director 6 and/or her designees, and any interested Trustee, at 7 the National Conference on Public Employee Retirement 8 Systems from January 25 through January 27, 2015." 9 MS. MARCH: So moved. 10 CHAIRPERSON AARONSON: Is there a second? 11 MR. BROWN: Second. 12 CHAIRPERSON AARONSON: Any discussion? 13 (No response.) 14 All in favor? 15 (A chorus of "Ayes.") 16 Any opposed? 17 (No response.) 18 The ayes have it. 19 MS. REILLY: Next conference. 20 "Resolved, that the Trustees of the 21 Teachers' Retirement Board hereby approve the 22 attendance and participation of the Executive Director 23 and/or her designees and any interested Trustee at the 24 National Associations of Public Pension Attorneys, 25 from February 11-13, 2015."

15 14 1 MS. MARCH: So moved. 2 CHAIRPERSON AARONSON: Is there a second? 3 MS. WOLPERT: Second. 4 CHAIRPERSON AARONSON: Any discussion? 5 (No response.) 6 All in favor? 7 (A chorus of "Ayes.") 8 Any opposed? 9 (No response.) 10 Carried. 11 MS. REILLY: The next item on the agenda 12 is the calendar. Each Board member should have 13 received a calendar previously listing transactions 14 and payments for the month. I want to go over a quick 15 summary. 16 But first is the matter of the approval of 17 the minutes of the regular meeting of November 20, CHAIRPERSON AARONSON: Do I hear a motion 20 to approve the minutes? 21 MS. MARCH: So moved. 22 CHAIRPERSON AARONSON: Second? 23 MS. WOLPERT: Second. 24 CHAIRPERSON AARONSON: Minutes have been 25 moved and seconded.

16 15 1 Any discussion? 2 (No response.) 3 Seeing none, all in favor? 4 (A chorus of "Ayes.") 5 Any opposed? 6 (No response.) 7 Motion carries; the minutes carry. 8 The rest of the report will be documented 9 at one time. 10 MS. REILLY: Pages 1 through 14 inclusive 11 are the monthly periodic payroll of TDA, excess and 12 loan payments. 13 Page 15, payroll summary accounts payable, 14 new retirees and TDA accounts. 15 Pages 16 through 33 inclusive are transfer 16 of active TDA deferred to annuity payments. 17 Pages 34 through 58 inclusive are the 18 fractional payments. 19 Pages 59 through 67 inclusive are the 20 uncollected checks for deceased members. 21 Pages 68 to 83 inclusive are beneficiaries 22 continuing option payments. 23 Pages 84 through 101 inclusive are 24 conversions to pop-up payments. 25 Pages 102 to 192 inclusive are

17 16 1 beneficiaries who receive one-time payments from the 2 QPP and TDA accounts. 3 Pages 193 to 195 inclusive are return 4 accumulated salary deductions. 5 Page 196 is transfer of funds between 6 banks. 7 Pages 197 through 201 inclusive are 8 purchase and sales of securities from the passport 9 fund program. 10 Pages 202 to 204 inclusive are outstanding 11 checks. 12 Pages 205 through 243 inclusive are 13 revisions, including those under class coverage. 14 Page 244 are layoffs without pay. 15 Pages 245 to 247 are payments for service 16 credit. 17 Page 248, denied accident disability 18 benefits. 19 Page 249 are approved disability benefits. 20 Page 250 are minimum accumulations. 21 And 251 are new service retirement 22 payments. 23 CHAIRPERSON AARONSON: That is the 24 calendar for this month. 25 Motion to accept the calendar?

18 17 1 MS. MARCH: So moved. 2 MR. DORSA: Second. 3 CHAIRPERSON AARONSON: Any discussion? 4 (No response.) 5 All in favor? 6 (A chorus of "Ayes.") 7 Any opposed? 8 (No response.) 9 Carried. 10 MS. REILLY: The next item is any other 11 business before the Board? 12 MS. MARCH: It is the end of the calendar 13 year, not the school year. So I will not thank 14 everybody. It would only be half a thank you. But 15 what I'd like to do is wish everybody a very happy and 16 healthy new year, and happy holiday, whichever one you 17 may celebrate, and wish your families a joyous time 18 during a joyous time of the year. 19 CHAIRPERSON AARONSON: Anybody with any 20 other business? Members of the public? 21 (No response.) 22 Seeing none, is there a motion to go into 23 executive session? 24 MR. DORSA: So moved. 25 MS. MARCH: Pursuant to Public Officer Law

19 , I move that we go into executive session to 2 discuss an issue regarding an investment matter. 3 CHAIRPERSON AARONSON: Discussion? 4 (No response.) 5 All in favor? 6 (A chorus of "Ayes.") 7 Any opposed? 8 We are now going into executive session; 9 and may I ask those people not involved in investment 10 matters to please leave. 11 (People left the room.) 12 (Whereupon, the Board entered executive session.)

20 19 1 (Whereupon, the Board returned to public 2 session. 3 CHAIRPERSON AARONSON: We're now out of 4 executive session. We're now in regular session. 5 And a summary, Susan, of what we did in 6 executive session? 7 MS. STANG: In executive session a report 8 on proxy voting was presented and discussed. 9 Also, there was an update on board 10 training, which was presented. 11 CHAIRPERSON AARONSON: That's summary of 12 what we did in executive session. 13 Any other business before us? 14 (No response.) 15 Seeing none, is there a motion to adjourn? 16 MS. MARCH: So moved. 17 CHAIRPERSON AARONSON: A second? 18 MS. WOLPERT: Second. 19 CHAIRPERSON AARONSON: Any discussion? 20 (No response.) 21 All in favor? 22 (A chorus of "Ayes.") 23 Any opposed? 24 We're adjourned. 25 (Time noted: 4:28 p.m.)

21 C E R T I F I C A T I O N 3 4 I, Jeffrey Shapiro, a Shorthand Reporter and 5 Notary Public, within and for the State of New York, do 6 hereby certify that I reported the proceedings in the 7 within-entitled matter, on Thursday, December 18, 2014, 8 at the offices of the NEW YORK CITY TEACHERS RETIREMENT 9 SYSTEM, 55 Water Street, New York, New York, and that 10 this is an accurate transcription of these proceedings. 11 IN WITNESS WHEREOF, I have hereunto set my 12 hand this 21st day of December, JEFFREY SHAPIRO